Wednesday Morning Cheat Sheet: 3 Stories Moving Markets

Markets were mixed in Asia overnight. Investors in Japan seemed keen to take profits, driving the Nikkei down 0.44 percent. Despite a soft end to the month, the index closed out April nearly 12 percent higher, its ninth consecutive month of gains. The Hang Seng climbed 0.69 percent, while the S&P/ASX 200 was off 0.48 percent.

European markets were mostly up in mid-day trading on Wednesday. Germany’s DAX was up 0.51 percent, London’s FTSE 100 was up 0.64 percent, while the STOXX 50 index was flat.

1) Chinese Manufacturing Declines in April: China’s manufacturing Purchasing Managers’ Index fell from 50.9 in March to 50.6 in April, according to the China Federation of Logistics and Purchasing. While the index remained above 50 — which indicates growth — for the seventh consecutive month, April’s slightly lower reading means that expansion has slowed. Economists were expecting the index to remain flat at 50.9.

The relatively soft PMI data lines up with relatively soft GDP growth of 7.7 percent in the first quarter, as well as an 8.9 percent increase in industrial output in March. Economists are expecting similarly modest growth in the second quarter.

2) UK Manufacturing Stabilizes: The United Kingdom’s manufacturing PMI edged up from 48.6 in March to 49.8 in April. At 49.8, the index showed that manufacturing technically remained in contraction for a third month. Rob Dodson, senior economist at Markit, which compiled the survey, commented: “Following the poor start to the year, when manufacturing acted as a drag on the economy in the opening quarter, it is welcome to see the sector showing signs of stabilising in April. With forward-looking indicators such as new orders and the demand-to-inventory ratio also ticking higher, the sector should at least be less of a drag on broader GDP growth in the second quarter.”

3) April Job Gains Fall Short of Expectations: Private sector employment increased by 119,000 in April, according to the ADP National Employment Report. Economists were expecting about 155,000 additions to private-sector payrolls. This is the slowest rate of job growth since September.